Question 5 (a) What is the definition and formula of income elasticity of demand? How is it interpreted? Calculate the income elasticity of demand for food in Malaysia, given that the average income per capita increased from RM 40,000 to RM 44,000 and the average expenditure on food increased from RM 8,000 to RM 8,800 between 2019 and 2020.(10 marks)

(b) Suppose the price increases from RM5 to RM6, and the quantity demanded decreases from 100 units to 80 units. Calculate the price elasticity of demand using the midpoint method. Is the demand elastic, inelastic, or unit elastic?(5 marks)